you will never earn enough to save. So start savings from your very first salary. We can go through the value of saving by the proverb if you save money today, money will save you tomorrow. So your first salary is the best day to start saving. If you missed it, every passing day is a day of loss which will impact in a long run of your life. Your first salary may be as much as less which is hard to survive but mind it what you save is your actual earning. You don’t have to plan to save but plan to invest it. Investment is the way to save money which will grow with time and create a huge wealth for you.
A very less amount you invest continuously will create a sum of money you can’t even think of. It might look less but start to invest it in a proper way. The power of compounding will turn your small investment into a large sum of.
There are a lot of options to invest even a small amount. You can go through any one which suits you. But never forget to check the policies of any mode of investment and don’t believe on any verbal promise. Terms and conditions are written on the documents always read it thoroughly. It might take some time but it will keep you safe in savings because savings are for the future so terms and conditions can harm your future return. At the time of need you may feel cheated so always go through the term and condition before any investment.
SIP (Systematic Investment Plan): This is the best way to start investment in early ages and for small sums. Its return depends upon market but we assume on past experiences that it will give lump sum of 12% rate of interest. Small investment of 1000 will lead you to a handsome wealth. It depends on duration of time how long you carry it. In between you can withdraw some of your balance in your SIP account and rest will carry forward. You can have many SIP’s you want but always invest in different funds. There are a number of companies you may go with but just after clear terms and conditions. Sometimes you may have insurance also on your SIP depends on companies offer.
R.D. (Recurring Deposit): It is a very traditional form of investment but it is actually not meet out with the inflation rate. Banks are providing 6 to 8% rate of interest and post offices are giving 8.50 percent interest rate. RD investment will deduct from your saving account and you don’t have to bother to rush banks but in post offices you have to go for deposit. If you invest a thousand every month after 5 years you will have a handsome amount of nearly 70 thousand. But in today’s scenario instead of investment it can be considered as just saving tool.
PPF (Public Provident Fund): Open a PPF account in bank or post office as soon as your EPF or GPF opens. Anyone can open it with minimum of 500 and maximum of 1,50000. It will give you compound interest and also there is no tax on any level. Even it saves taxes too. This investment is at least for 15 years and but you can have some of the money after 7 years. Every year you may deposit your savings for 6 times maximum. Every government employee already have a GPF i.e. (Government Provident Fund) and private firm’s employee have EPF (Employee Provident Fund). Along With these provident fund you must have a PPF too as it was started for every citizen of the nation and because of its compounding power you will generate a very high amount after 15 years. Generally youth opens it with a goal to have an own home.
NPS Tier 1: NPS means National Pension Scheme, is actually a pension scheme but you can have it as an investment tool also. NPS has 2 system of investment. One is Tier 1 and another Tier 2. Investment in tier 2 is totally in pension because you can’t withdraw it. So you can start your minimum investment with NPS Tier 1. Because of compound interest you will have much return and can have a handsome money.
Atal pension Yojna: Atal pension is not an investment plan but this is security plan. But it is must for your portfolio Its premium is very low depends upon your age. So if you are about 30 your premium will be very low i.e. around rupees 500 and will secure you a little bit. In this plan when you will be 60 you will start to get amount of 5000 for all your life and your nominee will get a maturity amount after you.
In short, we can suggest you to start your investment with SIP and secure yourself with APY (Atal Pension Yojna). Later diversify your investment to go with these plans of investment. There are many more ways to invest but these are comparatively safe and secure. And if we consider 5 years as a standard unit for investment, you will have a very handsome amount in your hand just after a 5 years of time span.
By
Sudhir Singh
